Law firm sued over alleged role in investment scheme involving Derry man
A Pittsburgh law firm was sued on Monday for its alleged role in an investment scheme involving a Derry man who vanished in 2009 and who has been on the run from federal authories following his indictment for mail and wire fraud, according to court documents.
Meyer Unkovic & Scott was sued by Joseph Labriola, the liquidating receiver for East Haven Investments, a Monroeville-based firm operated by Frank Guzik Jr.
Guzik purchased, renovated and then sold homes while soliciting investors with promises of returns ranging from 8 percent to 14 percent, according to the suit.
The action was filed by attorney Eric T. Smith of Schnader Harrison Segal & Lewis of Pittsburgh, which is seeking more than $11.2 million in damages from Meyer Unkovic & Scott for its alleged role in the scheme.
The complaint alleges violations of Pennsylvania Unfair Trade Practices and Consumer Protection laws as well as professional negliegence.
Meyer Unkovic & Scott agreed to serve as an independent third party for East Haven, which had solicited investors for Guzik's scheme, according to the suit.
Guzik approached the firm in May 2004 about acting as an independent third party for East Haven. Two months later, the firm agreed to serve in that role.
The law firm's job, according to the complaint, was to protect the money investors gave Guzik. Investments were sent by wire to East Haven and were to be released to Guzik once he and the law firm signed the document, according to the suit.
“Investors were assured in the prospectus that the firm would represent their interests and provide oversight to ensure the safety of the invested funds including overseeing all lending activities and signing off on each disbursement of investors' money,” Smith said. “Obviously, something failed in their oversight that was supposed to be provided by the law firm.”
Attorneys Dennis Unkovic and managing partner Patricia Dodge did not respond to requests for comment.
Smith said investors lost $3.3 million with East Haven, but he is seeking triple damages and fees for Meyer Unkovic & Scott's handling of the investments.
After East Haven collapsed and Guzik disappeared, Labriola was appointed receiver of the company and charged with the task of closing the business and distributing any remaining money. When he began examing East Haven's financial records, he discovered there was no money left.
While he was in business, Guzik allegedly solicited more than $14 million from 105 investors in a “house flipping” scheme. A federal grand jury charged that he provided investors with multiple mortgages on the same properties and used the mails and electronic banking transfers to accomplish his fraud.
No one has seen Guzik since 2009, when he vanished after cleaning out $249,000 from a bank account. The IRS later said Guzik was last seen in Texas, where he purchased $200,000 in untraceable gold coins from a precious metals dealer.
A business associate, Bonnie Gardner, 45, faces trial this summer for conspiracy, wire and mail fraud, and money laundering for her alleged role in the scam, according to a federal indictment handed down last year.
Richard Gazarik is a staff writer for Trib Total Media. He can be reached at 724-830-6292 or at firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- WCCC revises purchasing policy
- Builder finds calling as chaplain at Westmoreland jail
- Scholarship fund at St. Vincent to honor Kennametal exec
- Water service restored in Derry after leaks
- 7 arrested in Latrobe-area drug dealing
- Mt. Pleasant-based author details area’s ‘Hidden History’
- Woman admits to theft of 2 weapons in Latrobe shooting case
- Woman to stand trial in Jeannette tot’s death
- Westmoreland, Fayette groups open doors to share Thanksgiving meals
- New Stanton council hikes garbage fees to $13.65 per month
- Westmoreland, Fayette towns prepare to ring in holidays